The electronic structure of YBa2CU3O7 has been investigated by the method of relativistically parametrized extended Huckel (REX) calculations. Calculations have been carried out in steps, for different clusters of atoms, so as to obtain a proper picture of the charge distribution in the solid state. We have calculated the total energies of different electronic configurations for each cluster. The bulk has been simulated as a vast collection of appropriate point charges for each electronic configuration of the cluster. Interaction of the cluster with its counterion environment has been treated in the point charge interaction model. The ground-state electronic configuration has then been determined for each cluster embedded in solid. These calculations show that on average the hole has a higher probability to reside on the 0(4) atoms and a lower probability to be found in the Cu(1)-O(1) chains. These results are in good agreement with experimental observations.